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KUALA LUMPUR, JULY 2026 – Saudi Arabia has sharply lowered the official selling price (OSP) of its flagship Arab Light crude for Asian buyers in August, marking the lowest level since June 2020. The kingdom set the price at US$1.50 per barrel below the Oman/Dubai average, according to reports cited by Investing.com.
The latest adjustment represents a major shift from the previous month, when the selling price stood at a premium of US$9.50 per barrel. The cut comes as spot crude markets weaken due to rising supply from the Middle East, increasing pressure on exporters to stay competitive in Asia.
Reuters reported that the August price cut amounted to an US$11 reduction from the previous month, making it the biggest monthly drop in more than two decades. The move highlights Saudi Arabia’s effort to protect its market share as Asian refiners gain access to cheaper crude supplies from other Gulf producers.
Market participants had expected a smaller adjustment, with forecasts suggesting Saudi Arabia would set Arab Light crude at a premium of between US$1.50 and US$3.00 per barrel above the Dubai and Oman average. Instead, the final price came in far lower, signalling a more aggressive pricing strategy.
The decision also reflects broader concerns over oversupply in the oil market. Rising Middle Eastern supply, weaker spot prices and growing competition among Gulf producers have pushed crude sellers to offer more attractive terms to Asian customers.
Asian refiners are a key target for Saudi crude exports, but competition has intensified as other regional producers offer discounts to secure demand. Reuters reported that some traders believe Saudi crude may still face challenges because rival Gulf supplies remain cheaper even after the latest price cut.
The price reduction may also influence wider oil market sentiment, especially as investors monitor demand from Asia, crude output recovery and geopolitical risks around major shipping routes. Brent and WTI prices have remained sensitive to supply developments, OPEC+ output plans and regional security concerns.
